The CFTC issued an order against a telemarketing firm and its owners for dealing in illegal off-exchange finance transactions in precious metals and forfailing to be properly registered.

The CFTC found that from January 2012 to at least March 2013, the firm solicited retail customers for the purpose of engaging in financed transactions in precious metals. According to the CFTC, customers paid a percentage of the purchase price for the metals and received financing for the remainder of the purchase price while paying commissions and fees on the transactions. The order states that financed transactions in commodities with retail customers like those engaged in by the respondents must be executed on a CFTC-regulated exchange unless actual delivery occurs within 28 days of the agreement, or the contract creates an enforceable obligation to deliver between a seller and a buyer who both have the ability to deliver and accept delivery.

The CFTC found that because the respondents' retail-financed precious metals transactions were done off-exchange and delivery took place more than 28 days from the agreement, the transactions were illegal. The CFTC also found that (i) the firm failed to register as a futures commission merchant, as required by the CEA, (ii) the firm was liable for the violations of its individual telemarketing agents, and (iii) the principals of the firm were liable as controlling persons.

The CFTC ordered the firm and its owners to pay restitution to their customers and further civil monetary penalties. The order also prohibited the firmfrom trading on or pursuant to the rules of any registered entity.

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